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OncoGenex Retrenches, and Searches for Answers, After Failed Trial

There are several harsh lessons to be learned in drug development, and OncoGenex learned perhaps the most brutal one of all: a knockout Phase 2 trial doesn’t guarantee a thing in Phase 3.

Earlier this year, Bothell, WA- and Vancouver, BC-based OncoGenex (NASDAQ: OGXI) thought it had everything figured out. Its RNA-based cancer drug, custirsen, seemed to be disarming a protein thought to help tumors resist chemotherapy. Take out that protein, and custirsen would make chemotherapy more effective. Patients should live longer. And in fact, patients in Phase 2 trials for prostate cancer on custersin and chemo lived months longer than the average for patients with similar diagnoses and chemo alone. So OncoGenex felt pretty confident about the idea of recreating that trial, just with more patients, and waiting for the confirming data to roll in.

To the stunned disbelief of OncoGenex, however, the trial the company ran—a 1,022-patient study, called Synergy, of prostate cancer patients—flopped. Patients getting custirsen and chemotherapy lived only slightly longer, a median of about a month, than those on chemo and a placebo. The hazard ratio for overall survival was a disastrous 0.93, meaning in a statistical sense, there was barely any difference between the two groups of patients. Droves of investors immediately jumped ship, sending shares down more than 50 percent. They currently trade at just under $4 per share, levels that the company hasn’t seen in more than five years.

OncoGenex isn’t alone here, of course. Plenty of cancer drugs fall flat in Phase 3. A recent study published by Nature Biotechnology, for instance, showed that late-stage oncology trials have the poorest success rate of any therapeutic area. A 2012 article in the Journal of the National Cancer Institute put that Phase 3 failure rate at a whopping 62 percent. Even so, it’s not as common for those failures to follow the kind of mid-stage trial OncoGenex had posted.

Scott Cormack, CEO of OncoGenex

“I like to follow logical dots. Data have to make sense,” says OncoGenex CEO Scott Cormack. “And when you come up with a result like this, that is very different than your previous experiences, and all of your experiences, you kind of shake your head and go, did we miss something? Or is this the one that is the outlier? Until you figure that out, you continue to lose a little bit of sleep.”

Indeed, the future now looks much tougher for OncoGenex. The company is still plowing forward with two more late-stage studies of custirsen: a test of the drug in prostate cancer patients who have progressed on to their second chemo drug, and a second-line trial for lung cancer. And it’s got a second drug prospect, apatorsen, that it owns full rights to, and is currently being tested in a slew of mid-stage studies. Apatorsen dials back the production of a protein that’s elevated in cancer cells and that helps them survive. The results from early-stage trials of the drug have been promising so far.

OncoGenex isn’t done, not by a long shot, Cormack insists. It failed one of 10 trials. It has plenty more bullets in the chamber.

But the crushing failure has brought a dramatic change in OncoGenex’s fortunes and forced a shift in strategy. Had custirsen succeeded, the company could’ve banked millions in future milestone payments and royalties from partner Teva Pharmaceutical (NYSE: TEVA), and taken its time making a strategic decision on apatorsen. The stock price would have stayed high, making it easy to turn to Wall Street for cash.

Now, however, OncoGenex doesn’t have the luxury of time. Without new financing, the company’s cash will run out after the first quarter of next year—before data come in from the other custirsen Phase 3 studies. So the company needs apatorsen to come up aces when results from the first of that drug’s Phase 2 trials—a bladder cancer study—-come later this year. OncoGenex is thinking about whether it’ll finance, or find a partner, on a more compressed timeframe than it would have before, says Cormack.

So why was OncoGenex’s confidence in the pivotal custirsen trial so badly misplaced? And will the altered strategy work?

Some of the answers lie in the company’s history.

OncoGenex’s story begins in the Prostate Centre at Vancouver General Hospital in Canada, where then-urologist and surgeon Martin Gleave was trying to figure out why cancer drugs stopped working in prostate cancer patients. He banked tumor tissues from surgical procedures he’d perform—prostate or lymph node tissue—on patients in various stages of cancer and treatment. Then he’d look for … Next Page »

One response to “OncoGenex Retrenches, and Searches for Answers, After Failed Trial”

If Cormack can explain why no major Oncology player was willing to pony up and why he had to settle for a very unexciting deal with a third rate pharma company, then that would go a long way to help me believe that the data from Ph2 was clean. My guess is that more sophisticated companies saw issues with the Ph2 design and data.